Turnbull puts power companies on notice

Power companies will be forced to overhaul their pricing plans as the Turnbull government drafts new rules to give households more scope to cut their electricity bills, The Australian reports.

The move comes amid fears customers are being charged $1500 more than needed on some contracts.

Prime Minister Malcolm Turnbull will put company chiefs on notice today to prepare for tougher electricity market rules, as government officials canvass changes that would require retailers to reveal more of their price changes to customers.

Writing in The Australian today, Energy Minister Josh Frydenberg warns of “ridiculous” situations where “loyal customers are left languishing” because companies have no obligation to let them know when their prices rise.

“As the rules currently stand, retailers are not obliged to inform customers when their discount period ends if their contract is ongoing,” Mr Frydenberg writes.

“This should change, as customers deserve to know not only when the bill is changing, but by how much.”

The government estimates that half of all electricity customers are on contracts that offer a low-price period but place no requirement on the company to reveal when the discounts end and the prices soar.

The issue is turning into a flashpoint with the industry as the government vows to do more to ease the pressure on power prices, following a move to impose export limits on gas companies to boost local supplies.

The government has advice that shows there were 1178 residential market electricity offers available on the east coast early this month on its Energy Made Easy comparison service.

More than half of these gave retailers full scope to vary their prices with little or no notice.

The Prime Minister will try to shift his agenda to energy affordability after yesterday sealing a Coalition agreement on a “people’s vote” to decide same-sex marriage, as the government struggles in the polls and attempts to assure voters it is acting on cost-of-living issues.

The government is preparing to call in the Australian Competition & Consumer Commission if needed to force disclosure from power companies, as the market watchdog investigates the retail market and its profit margins.